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Sustainable business
Sustainable business, or green business, is an enterprise to be that has no negative impact on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies. In general, business is described as green if it matches the following four criteria: # It incorporates principles of sustainability into each of its business decisions.Cooney, S. (2009) "Build A Green Small Business. Profitable ways to become an ecopreneur." # It supplies environmentally friendly products or services that replaces demand for nongreen products and/or services. # It is greener than traditional competition. # It has made an enduring commitment to environmental principles in its business operations. A sustainable business is any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. In other words, it is a business that “meets the needs of the present world without compromising the ability of the future generations to meet their own needs.”United Nations General Assembly (1987) [http://www.un-documents.net/wced-ocf.htm Report of the World Commission on Environment and Development: Our Common Future]. Transmitted to the General Assembly as an Annex to document A/42/427 - Development and International Co-operation: Environment. Retrieved on: 2009-02-15.Anderson, D. R. (2006). "The critical importance of sustainability risk management." Risk Management. Vol. 53, no. 4. It is the process of assessing how to design products that will take advantage of the current environmental situation and how well a company’s products perform with renewable resources.Rennie, E. (2008). "Growing Green, Boosting the bottom line with sustainable business practices." APICS Magazine. Vol. 18, no. 2. The Brundtland Report emphasized that sustainability is a three-legged stool of people, planet, and profit. Sustainable businesses with the supply chain try to balance all three through the triple-bottom-line concept—using sustainable development and sustainable distribution to affect the environment, business growth, and the society.Galvao, A. (2008) "The Next Ten Years: Energy and Environment." Crossroads 2008 presentation, MIT TechTV beta, 55 min., 51 sec.Galvao, A. "Mind Your Own Business, Why sustainable operations must be everyone’s chief concern." APICS Magazine, Vol. 18, no. 5 Everyone affects the sustainability of the marketplace and the planet in some way. Sustainable development within a business can create value for customers, investors, and the environment. A sustainable business must meet customer needs while, at the same time, treating the environment well.Rennie, E. (2008). "Painting a Green Story." APICS Extra. Vol. 3, no. 2. Environmental sphere A major initiative of sustainable businesses is to eliminate or decrease the environmental harm caused by the production and consumption of their goods.Becker, T. (2008). "The Business behind Green, Eliminating fear, uncertainty, and doubt." APICS magazine. vol. 18, no. 2. The impact of such human activities in terms of the amount of greenhouse gases produced can be measured in units of carbon dioxide and is referred to as the ''carbon footprint. The carbon footprint concept is derived from ecological footprint analysis, which examines the ecological capacity required to support the consumption of products.Hawken, P., A. Lovins, and L. Hunter Lovins. (1999). Natural Capitalism: Creating the Next Industrial Revolution. Little, Brown. Businesses take a wide range of green initiatives. One of the most common examples is the act of "going paperless" or sending electronic correspondence in lieu of paper when possible. On a higher level, examples of sustainable business practices include: refurbishing used products (e.g., tuning up lightly used commercial fitness equipment for resale); revising production processes in order to eliminate waste (such as using a more accurate template to cut out designs); and choosing nontoxic raw materials and processes. For example, Canadian farmers have found that hemp is a sustainable alternative to rapeseed in their traditional crop rotation; hemp grown for fiber or seed requires no pesticides or herbicides. Sustainable business leaders also take into account the life cycle costs for the items they produce. Input costs must be considered in regards to regulations, energy use, storage, and disposal.Penfield, P. (2008). "Generating for the Environment, Drive down costs while helping Mother Nature." APICS Magazine, Vol. 18, no. 6. Designing for the environment (DFE) is also an element of sustainable business. This process enables users to consider the potential environmental impacts of a product and the process used to make that product. Among large corporations, Ford Motor Company occupies an odd role in the story of sustainability. Ironically, founder Henry Ford was a pioneer in the sustainable business realm, experimenting with plant-based fuels during the days of the Model T. Ford Motor Company also shipped the Model A truck in crates that then became the vehicle floorboards at the factory destination. This was a form of upcycling, retaining high quality in a closed-loop industrial cycle. Furthermore, the original auto body was made of a stronger-than-steel hemp composite. Today, of course, Fords aren't made of hemp or running on the most sensible fuel. Currently, Ford's claim to eco-friendly fame is the use of seat fabric made from 100% post-industrial materials and renewable soy foam seat bases. Ford executives recently appointed the company’s first senior vice president of sustainability, environment, and safety engineering. This position is responsible for establishing a long-range sustainability strategy and environmental policy. The person in this position will also help develop the products and processes necessary to satisfy both customers and society as a whole while working toward energy independence. It remains to be seen whether Ford will return to its founder's vision of a petroleum-free automobile, a vehicle powered by the remains of plant matter. Smaller companies such as Nature's Path, an organic cereal and snack making business, have also made significant sustainability gains in the 21st century. CEO Arran Stephens and his associates have ensured that the quickly growing company's products are produced without toxic farm chemicals. Furthermore, employees are constantly encouraged to find ways to reduce consumption. Sustainability is an essential part of corporate discussions. Another example comes from Salt Spring Coffee, a company created in 1996 as a certified organic, fair trade, coffee producer. In recent years they have become carbon neutral, lowering emissions by reducing long-range trucking and using bio-diesel in delivery trucks, upgrading to energy efficient equipment and purchasing carbon offsets. The company claims to offer the first carbon neutral coffee sold in Canada. Salt Spring Coffee was recognized by the David Suzuki Foundation in the 2010 report Doing Business in a New Climate. A third example comes from Korea, where rice husks are used as a nontoxic packaging for stereo components and other electronics. The same material is later recycled to make bricks. The many possibilities for adopting green practices have led to considerable pressure being put upon companies from consumers, employees, government regulators and other stakeholders. Some companies have resorted to greenwashing instead of making meaningful changes, merely marketing their products in ways that suggest green practices. For example, various producers in the bamboo fiber industry have been taken to court for advertising their products as more "green" than they are. Still, countless other companies have taken the sustainability trend seriously and are enjoying profits. The Gort Cloud written by Richard Seireeni, (2009), documents the experiences of sustainable businesses in America and their reliance on the vast but invisible green community, referred to as the gort cloud, for support and a market. Green investment firms are consequently attracting unprecedented interest. In the UK, for instance, the Green Investment Bank is devoted exclusively to supporting renewable domestic energy. However, the UK and Europe as a whole are falling behind the impressive pace set by developing nations in terms of green development. Thus, green investment firms are creating more and more opportunities to support sustainable development practices in emerging economies. By providing micro-loans and larger investments, these firms assist small business owners in developing nations who seek business education, affordable loans, and new distribution networks for their "green" products. Social sphere Organizations that give back to the community, whether through employees volunteering their time or through charitable donations are often considered to be socially sustainable. Organizations also can encourage education in their communities by training their employees and offering internships to younger members of the community. Practices such as these increase the education level and quality of life in the community. In order for a business to be truly sustainable, it must sustain not only the necessary environmental resources, but also its social resources, including employees, customers (the community), and its reputation. Organizations The European community’s Restriction of Hazardous Substances Directive restricts the use of certain hazardous materials in the production of various electronic and electrical products. Waste Electrical and Electronic Equipment (WEEE) directives provide collection, recycling, and recovery practices for electrical goods. The World Business Council for Sustainable Development and the World Resources Institute are two organizations working together to set a standard for reporting on corporate carbon footprints. Lester Brown’s Plan B 2.0 and Hunter Lovins’s Natural Capitalism provide information on sustainability initiatives. Corporate sustainability strategies Not all eco-strategies can be incorporated into a company's Eco-portfolio immediately. The widely practiced strategies include: Innovation,Collaboration,Process Improvement and Sustainability reporting. * 1. Innovation & Technology This introverted method of sustainable corporate practices focuses on a company's ability to change its products and services towards less waste production and sustainable best practices. * 2. Collaboration The formation of networks with similar or partner companies facilitates knowledge sharing and propels innovation. * 3. Process Improvement Continuous process surveying and improvement is essential to reduction in waste. Employee awareness of company-wide sustainability plan further aids the integration of new and improved processes. * 4. Sustainability Reporting Periodic reporting of company performance in relation to goals. This goals is often incorporated in to the corporate mission (as in the case of Ford Motor Co.). Page text. Standards Enormous economic and population growth worldwide in the second half of the twentieth century aggravated the factors that threaten health and the world — ozone depletion, climate change, depletion, fouling of natural resources, and extensive loss of biodiversity and habitat. In the past, the standard approaches to environmental problems generated by business and industry have been regulatory-driven "end-of-the-pipe" remediation efforts. In the 1990s, efforts by governments, NGOs, corporations, and investors began to grow substantially to develop awareness and plans for investment in business sustainability. One critical milestone was the establishment of the ISO 14000 standards whose development came as a result of the Rio Summit on the Environment held in 1992. ISO 14001 is the cornerstone standard of the ISO 14000 series. It specifies a framework of control for an Environmental Management System against which an organization can be certified by a third party. Other ISO 14000 Series Standards are actually guidelines, many to help you achieve registration to ISO 14001. They include the following: *ISO 14004 provides guidance on the development and implementation of environmental management systems *ISO 14010 provides general principles of environmental auditing (now superseded by ISO 19011) *ISO 14011 provides specific guidance on audit an environmental management system (now superseded by ISO 19011) *ISO 14012 provides guidance on qualification criteria for environmental auditors and lead auditors (now superseded by ISO 19011) *ISO 14013/5 provides audit program review and assessment material. *ISO 14020+ labeling issues *ISO 14030+ provides guidance on performance targets and monitoring within an Environmental Management System *ISO 14040+ covers life cycle issues LEED certification The Leadership in Energy and Environmental Design standards were developed by the US Green Building Council in an effort to propel green building design in the United States. LEED certification is very prestigious title and can be attained through "compliance with all environmental laws and regulations, occupancy scenarios, building permanence and pre-rating completion, site boundaries and area-to-site ratios, and obligatory five-year sharing of whole building energy and water use data from the start of occupancy (for new construction) or date of certification (for existing buildings)".15. Six essential characteristics Matthew Tueth, Ph.D. reiterates the ideas put forward by authors such as Paul Hawken (The Ecology of Commerce and Natural Capitalism), Bill McDonough and Michael Braungart (Cradle to Cradle), and Janine Benyus (Biomimicry) when he proposes that a mature and authentic sustainable business contains six essential characteristics. 1. Triple top-line value production "The TTL Establishes three simultaneous requirements of sustainable business activities - financial benefits for the company, natural world betterment, and social advantages for employees and members of the local community—with each of these three components recognized as equal in status." Whereas many businesses use the triple bottom line, "triple top line" stresses the importance of initial design and is a term attributable to McDonough and Braungart in their book Cradle to Cradle. 2. Nature-based knowledge and technology "This biomimicry-based principal sic involves the conscious emulation of natural-world genius in terms of growing our food, harnessing our energy, constructing things, conducting business healing ourselves, processing information and designing our communities" 3. Products of service to products of consumption "Products of service are durable goods routinely leased by the customer that are made of technical materials and are returned to the manufacturer and re-processed into a new generation of products when they are worn out.(These products are mostly non-toxic to human and environmental health but toxic materials that are used will be kept within a closed loop type system and not be able to escape into the environment). Products of consumption are shorter lived items made only of biodegradable materials. They are broken down by the detritus organisms after the products lose their usefulness.(These are also non-hazardous to human or environmental health). This principal requires that we manufacture only these two types of products and necessitates the gradual but continual reductions of products of service and their replacement with products of consumption as technological advancements allow." See Cradle to Cradle for other thoughts on Technical(Products of Service) and Biological(Products of consumption) nutrients. 4. Solar, wind, geothermal and ocean energy. "This principalsic advocates employing only sustainable energy technology—solar,wind,ocean and geothermal—that can meet our energy needs indefinitely without negative effects for life on earth." Other authors, such as Paul Hawken, have referred to this as utilizing current solar income. 5. Local-based organizations and economies "This ingredient includes durable, beautiful and healthy communities with locally owned and operated businesses and locally managed non-profit organizations, along with regional corporations and shareholders working together in a dense web of partnerships and collaborations." '6. Continuous improvement process ' "Operational processes inside successful organizations include provisions for constant advancements and upgrade as the company does its business. The continuous process of monitoring, analyzing, redesigning and implementing is used to intensify TTL value production as conditions change and new opportunities emerge." Challenges Implementing sustainable business practices will have an effect on profits and 'bottom line'. This challenge makes the thought of many corporate executives cringe. Apart from the normal contextual issues, the change in identity and potential success should also be observed. During a time where environmental awareness is popular, the reception of possibly implementing green strategies is more likely to be embraced by employees and stakeholders. A negative correlation is drawn between environmental performance and economic performance. To circumvent this issue, policies in the United States such as ISO certification (see: LEED Certification) quell some of those worries. See also *B4E Business for the Environment *Green America *Bottom of the Pyramid *Bright green *Clean Edge *Clean Energy Trends *Cleaner Production *Corporate sustainability *Externality *Gort cloud *Green brands *Green Globe *Green MBA *Low carbon economy *The Natural Step *Net Impact *Not Just For Profit *Renewable energy commercialization *Renewable energy industry *Sustainable Business Network *The Clean Tech Revolution *The Lorax *Worldchanging Notes External links *David O'Brien Centre for Sustainable Enterprise, Concordia University, Montreal *Erb Institute for Global Sustainable Enterprise at the University of Michigan *Presidio Graduate School - On Sustainable Business * Center for Sustainable Global Enterprise at Cornell University *Natural Resources Defense Council *Triple Pundit: Blog on Sustainable Business *Eco-Friendly Companies *International Research Chair in Art and Sustainable Enterprise IRCASE, ICN Business School, Nancy, France *Sustainable Marketplace Category:Sustainable living Category:Sustainable Business Practices Category:Sustainability